Developed Countries
China’s aggressive retaliation against U.S. tariffs will enable President Trump to shift from punishing allies and redirect the trade war toward China. If Beijing does not react to the latest tariffs by doubling its fiscal stimulus, it indicates they are planning something different, as China will encounter economic destabilization. The likelihood of a hybrid military pressure on Taiwan will rise.
We maintain a defensive asset allocation, as the hit to confidence will linger even if tariff tensions ease. The past few days have seen sharp volatility, with trade headlines swinging markets between despair and euphoria. At the time of writing, President…
We maintain an overweight in government bonds, as recent yield spikes appear technical and unsustainable. US 10-year Treasury yields have surged even as global markets were selling off on growth fears. The move has spread to higher-yielding DMs like the UK,…
Our Global Fixed Income strategists continue to recommend long duration exposure, curve steepeners, and an underweight in corporate bonds relative to government bonds, as global recession risks rise. The trade war has increased the odds of a downturn, but the…
Equities’ post-Liberation Day selloff was historic, but cross-asset signals make it an anomaly. The post-Liberation Day S&P 500’s three-day, 10%+ drawdown joined a list of major episodes that includes the March 2020 COVID-19 crash, the 2008 financial crisis,…
USD/CNY’s break above 7.3 signals more downside is in store for the yuan, supporting short high-beta FX and long CHF and JPY positions. The CNY has weakened in 2025 even as the US dollar has depreciated against most major currencies and gold. USD/CNY…
Our European strategists recommend staying defensive in the near term. Favor bonds over equities and defensives over cyclicals, as President Trump’s tariffs are set to push the Eurozone into recession by mid-2025. Industrial production, capital spending, and…
The sharp drop in March’s NFIB survey reinforces our defensive asset allocation, as small business sentiment weakens amid rising policy uncertainty. We remain overweight government bonds and underweight risk assets, while tactically shorting the January 2026…
Countertrend buy triggers have been activated for the S&P 500, Nasdaq and Nasdaq versus 30-year T-bond.